Professionals face a complex risk environment marked by economic uncertainty, rising costs, geopolitical instability and expanding sanctions. Increased regulatory and compliance scrutiny, ethical considerations, emerging technologies – particularly AI – cyber threats, and remote working are reshaping risks and expectations.
The Insolvency Service
Increasing insolvencies are driving more professional liability claims, particularly by liquidators and administrators who now have access to a mature litigation funding market. The Insolvency Service reported that one in 187 companies on the Companies House register entered insolvency between November 2024 and October 2025. Accountants may face allegations of negligent forecasting or restructuring advice, auditors for failing to identify going concern issues or material misstatements and solicitors face scrutiny for their roles in related transactions or litigation. We anticipate more claims in all of these areas.
Professionals themselves may become insolvent, exposing insurers to more direct claims under the Third Parties (Rights Against Insurers) Act 2010.
Economic crime
Accountants, trust corporations and solicitors are on the front line in the prevention of economic crime including anti money laundering (AML), counter terrorist financing (CTF) and tax avoidance. The new “failure to prevent fraud” offence under the Economic Crime and Corporate Transparency Act and increased company ownership transparency reinforce this duty. The government is consulting on appointing the FCA as the Single Professional Services Supervisor for accountancy firms, trust corporations and law firms - replacing the existing 22 regulators - which will require legislation and transitional measures. The division of responsibilities between the FCA (monitoring AML and CTF compliance) and other regulators (monitoring professional conduct) remains unclear, presenting transitional and increased compliance burdens.
Recent caselaw has demonstrated that firms and individuals may face significant litigation exposure, beyond regulatory penalties, if AML compliance lapses facilitate fraud or money laundering.
Professionals advising on tax planning face heightened exposure as HMRC’s new powers target “enablers” of tax avoidance, with potential multi-million-pound fines and public sanctions for compliance breaches.
Tax and wealth
Tax and wealth management related claims comprised at least 50% of ICAEW member scheme claims against accountants in 2024. Frequent tax law changes have increased scrutiny, exposing accountants and tax advisors to risks of claims for failing to promptly advise clients on the most tax-efficient structuring, particularly around non-dom status, IHT, and CGT reliefs. Claims from the misuse of Research and Development Tax Credits remain low but may increase following HMRC’s first corporate prosecution earlier this year under the “failure to prevent the facilitation of tax evasion” offence.
Professional negligence claims involving crypto assets are expected to rise, with auditors targeted for inadequate handling of their client’s crypto transactions; accountants for incorrect tax advice on digital assets; financial advisors for recommending unstable coins, and legal advisors for negligent tax advice on digital assets.
Insolvency practitioners may face claims under the Building Safety Act 2022 (BSA) and Leasehold and Freehold Reform Act 2024 for failing to meet new duties, including providing key building safety information and identifying defects within 14 days of appointment for higher-risk properties.
For brokers, underinsurance remains a major issue, driven by inflation, supply chain volatility and outdated valuations. Disputes also stem from misrepresentation of exclusions under the Consumer Duty and policy placement errors. Regulatory scrutiny is increasing, with commission arrangements under review after the car finance ruling and Trocadero case.
Construction
For construction professionals, the BSA’s extension of the limitation period for certain historic claims and recent court decisions in URS Corporation Ltd v BDW Trading Limited [2025]; Wilson & Others v HB (SWA) Ltd [2025] and Redrow PLC & Others v Sec of State [2024] are likely to encourage fire safety and Defective Premises Act claims. Uncertainty remains as to how the courts will disallow such claims or grant Building Liability Orders against associated companies. Continued use of standstill agreements, whilst remedial work is undertaken, may extend claim timelines. Climate change and the increasing incidence of extreme weather threaten more subsidence/heave claims and flooding claims, especially where development encroaches on flood plains. Furthermore, growing reliance on interactive design amongst consultants and specialists increases exposure to cybercrime risks.
